REPUBLIC OF THE PHILIPPINES
COURT OF TAX APPEALS
QUEZON CITY
Third Division
THE
OF
PEOPLE
PHILIPPINES,
Plaintiff,
CTA CRIM CASE NO. 0 -947
(NPS Docket No. XVI-INV-12G00346)
For: Violation of Section 255,
paragraph 1 of the National Internal
Revenue Code of 1997, as amended
-versusMembers:
RINGPIS-LIBAN, Chairperson,
MODESTO-SAN PEDRO, and
FERRER-FLORES,]]..
ZIEGFRIED LOO TIAN,
(No. 1013 Juan Luna Street,
Barangay 7, Zone 1, Tondo,
Manila)
-AT LARGE-
Promulgated:
FEB 0 1 2023
Accmed.
X-----------------------------------------------------------------------------------------------X
RESOLUTION
For the Court's resolution is the Information dated September 1, 2014,
filed on October 26, 2022 by the prosecution against the accused for violation of
Section 255, paragraph 1 of the National Internal Revenue Code of 1997 (1997
NIRC), as amended, which states:
"INFORMATION
The undersigned Prosecution Attorney, of the Department of Justice,
hereby accuses ZIEGFRIED LOO TIAN for violation of Section 255 of the
National Internal Revenue Code, as amended, committed as follows:
"That on or before July 20, 2011, in Quezon City,
Philippines, and within the jurisdiction of this Honorable
Court, the above-named accused, a Filipino citizen, flied his
Quarterly Value-Added Tax Return (VAT return), for second
(2"'~ quarter of taxable year 20 11 , knowing fully well that he is
required by the law and by the rules and regulations to supply
correct and accurate information within the period mentioned
RESOLUTION
CTA CRIM. CASE NO. 0-947
Page 2 of 8
therein, did then and there, willfully, unlawfully and feloniously
failed [sic] to supply correct and accurate information in his
VAT return by stating in the entry fields of the said return the
word 'exempt', when in truth and in fact said accused is not
exempted as he failed to comply with the substantiation and
reporting requirement under the tax law and revenue
regulations, which willful failure to supply correct and accurate
information resulted to the damage and prejudice of the
Government in the amount of Two Million Seven Hundred
Fifty Five Thousand Two Hundred Three Pesos and Ten
Centavos (Php2,755,203.10), exclusive of interests, penalties
and surcharges.
CONTRARY TO LAW.
1 September 2014, City of Manila for Quezon City, Philippines.
(SIGNED)
JAYVEE LAURENCE B. BANDONG
Prosecution Attorney
IBP Lifetime Roll No. 010413
Roll No. 59559
MCLE Compliance No. IV-0016353"
Attached to the Information dated September 1, 2014, which was approved
by Prosecutor General, Claro A. Arellano, are the following documents in
support of its allegations:
1. Certified True Copy of the May 11, 2017 Resolution of the Department
of Justice, Task Force on Bureau of Internal Revenue, signed by
Prosecution Attorney, Jayvee Laurence B. Bandong, which denied the
motion for reconsideration of respondent, Ziegfried Loo Tian, and ciffirmed
the September 1, 2014 Resolution;
2. Certified True Copy of the September 1, 2014 Resolution of the
Department of Justice, signed by Prosecution Attorney, Jayvee Laurence
B. Bandong and approved by Senior Assistant State Prosecutor, Susan F.
Dacanay, which recommended the filing against respondent Ziegfried Loo
Tian of:
a. Informations for two (2) counts of violation of Section 255 of the 1997
NIRC for failure to supply correct information in his Income Tax
Return (ITR) for taxable year 2010 and his failure to file his ITR for
taxable year 2011;
b. Informations for two (2) counts of violation of Section 254 of the 1997
NIRC for his attempt to evade or defeat income taxes for taxable years
2010 and 2011;
RESOLVTION
CTA CRIM. CASE NO. 0-947
Page 3 of 8
c. Informations for eight (8) counts of violation of Section 255 of the
1997 NIRC for failure to supply correct information in his ValueAdded Tax (VAT) Returns for taxable years 2010 and 2011; and,
d. Informations for eight (8) counts of violation of Section 254 of the
1997 NIRC for his attempt to evade or defeat taxes in his VAT returns
for taxable years 2010 and 2011.
3. Certified True Copy of the Department of Justice, National Prosecution
Service Verified Investigation Data Form dated July 5, 2012;
4. Certified True Copy July 5, 2012letter signed by Commissioner oflnternal
Revenue, Kim S. Jacinto-Henares, which referred the attached Joint
Complaint-Affidavit with its Annexes A to T-104, to the Department of
Justice for preliminary investigation and filing of information in court if
evidence so warrants, pursuant to the provisions of Section 220 of the
1997 NIRC; and,
5.
Certified True Copy of the July 5, 2012Joint Complaint-Affidavit with its
Annexes A to T-104, signed by the Revenue Officers of the Prosecution
Division-RATE, Bureau of Internal Revenue.
On the face of the Information, it appears that Ziegfried Loo Tian is accused of
violation of Section 255 the 1997 NIRC, committed on or before July 20, 2011,
or more than ten (10)years ago.
Section 255 the 1997 NIRC provides:
"TITLE X
STATUTORY OFFENSES AND PENALTIES
XXX
XXX
XXX
CHAPTER II
CRIMES, OTHER OFFENSES AND FORFEITURES
XXX
XXX
XXX
SEC. 255. Failure to File Return, Supply Correct and Accurate Information,
Pay Tax Withhold and Remit Tax and Refund Excess Taxes Withheld on Compensation.
-Any person required under this Code or by rules and regulations promulgated
thereunder to pay any tax make a return, keep any record, or supply correct
the accurate information, who willfully fails to pay such tax, make such return,
keep such record, or supply correct and accurate information, or withhold or
remit taxes withheld, or refund excess taxes withheld on compensation, at the
time or times required by law or rules and regulations shall, in addition to other
penalties provided by law, upon conviction thereof, be punished by a flne of
RESOLUTION
CTA CRIM. CASE NO. 0-947
Page 4 of 8
not less than Ten thousand pesos (P10,000) and suffer imprisonment of not
less than one (1) year but not more than ten (1 0) years.
Any person who attempts to make it appear for any reason that he or another
has in fact filed a rerum or statement, or actually files a return or statement
and subsequendy withdraws the same rerum or statement after securing the
official receiving seal or stamp of receipt of internal revenue office wherein the
same was actually filed shall, upon conviction therefor, be punished by a fine
of not less than Ten thousand pesos (P10,000) but not more than Twenty
thousand pesos (P20,000) and suffer imprisonment of not less than one (1)
year but not more than three (3) years."
In this connection, the 1997 NIRC imposes a five-year prescription period
for a// violations of any of its provisions. Specifically, Section 281 provides:
"TITLE X
STATUTORY OFFENSES AND PENALTIES
XXX
XXX
XXX
CHAPTER IV
OTHER PENAL PROVISIONS
XXX
XXX
XXX
SEC. 281. Prescription for Violations of a'!Y Provision of this Code. - All
violations of any provision of this Code shall prescribe after Five (5) years.
Prescription shall begin to run from the day of the commission of the
violation of the law. and if the same be not known at the time. from the
discovecy thereof and the institution of judicial proceedings for its
investigation and punishment.
The prescription shall be interrupted when proceedings are instituted
against the guilty persons and shall begin to run again if the proceedings are
dismissed for reasons not constituting jeopardy.
The term of prescription shall not run when the offender is absent
from the Philippines." (Underscoring supplied)
Section 281 of the 1997 NIRC, formerly Section 354 of the 1939 NIRC,
was interpreted by the Supreme Court in Emilio E. Lim and Antonia Sun Lim v.
RESOLUTION
erA CRIM. CASE NO. 0-947
Page 5 of 8
Court ofAppeals and People of the Philippines,1 a case also involving Section 71, similar
to the current Section 255 of the 1997 NIRC.
In that decision penned by Chief Justice Fernan, the Bureau of Internal
Revenue (BIR) assessed spouses Lim, business owners with dealership in
household appliances, deficiency income tax liabilities for 1958 and 1959, for
which they filed a protest and asked for reinvestigation. The BIR rendered a final
decision holding that there was no cause for reversal of the assessment against
the Lim couple. The spouses Lim were required to pay deficiency income taxes
for 1958 and 1959 amounting to PhP1,237,190.55 inclusive of interest,
surcharges and compromise penalty for late payment. Since the taxpayers did not
pay, however, on September 1, 1969, the matter was referred by the BIR to the
Manila Fiscal's Office for investigation and prosecution. On June 23, 1970, four
(4) separate criminal informations were filed against petitioners in the then Court
of First Instance of Manila, Branch VI for violation of Sections 45 and 51 in
relation to Section 73 (now Section 255) of the National Internal Revenue Code.
Trial ensued. On August 19, 1975, the trial court rendered two (2) joint decisions
finding petitioners guilty as charged. The convictions were affirmed by the Court
of Appeals, hence, the petition for review by certiorari with the Supreme Court.
Although the parties were in agreement that the period of prescription was five
years, they differed as to when the prescription should commence. The Supreme Court
adopted the view of the government and explained that under Section 354 (now
Section 281), as worded, prescription begins from the time of the discovery of the
commission of the crime and the institution of the judicial proceedings for investigation and
punishment --- which was on September 1, 1969 when the criminal cases were indorsed to the
Fiscal's Office for preliminary investigation. Therefore, the period from the indorsement to the
Fiscal's Office for preliminary investigation up to the filing of the information in court should
not exceedfive (5) years, thus:
"Preliminarily, it must be made clear that what we are dealing here are
criminal prosecutions for filing fraudulent income tax returns and for refusing
to pay deficiency taxes. The governing penal provision of the National Internal
Revenue Codes is Section 73 in conjunction with Section 354. The dispute
centers on the interpretation of Section 354 because in an effort to exculpate
themselves. petitioners have raised the defense of prescription. On the fiveyear prescriptive period. both parties are in agreement. They differ however in
the manner of computation. specifically as to when the period should
commence. Thus:
Section 73. Penalty for failure to file return or to pay tax.Anyone liable to pay the tax, to make a return or to supply
information required under this Code, who refuses or neglects
to pay such tax, to make such return or to supply such
information at the time or times herein specified in each year,
shall be punished by a fine of not more than two thousand
1
G.R. Nos. L-48134-37, October 18, 1990.
RESOLUTION
CTA CRIM. CASE NO. 0-947
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pesos or by imprisonment for not more than six months, or
both.
Any individual or any officer of any corporation, or
general co-partnership ... , required by law to make, render, sign
or verify any return or to supply any information, who makes
any false or fraudulent return or statement with intent to defeat
or evade the assessment required by this Code to be made, shall
be punished by a fme of not exceeding four thousand pesos or
by imprisonment for not exceeding one year, or both.
Section 354. Prescription for violations of any provisions of this
Code. - All violations of any provision of this Code shall
prescribe after five years.
PrescriPfion shall befin to run from the dav o{the commission of
the violation of the law. and ifthe same be not known at the time. (rom
the discoveo thereof and the institution qfjudicial proceeding for its
investigation and punishment.
The prescription shall be interrupted when
proceedings are instituted against the guilty persons and shall
begin to run again if the proceedings are dismissed for reasons
not constituting jeopardy.
The term of prescription shall not run when the
offender is absent from the Philippines. (Emphasis supplied)
XXX
XXX
XXX
With regard to Criminal Cases Nos. 1790 and 1791 which dealt with
petitioners' filing of fraudulent consolidated income tax returns with intent to
evade the assessment decreed by law, petitioners contend that the said crimes
have likewise prescribed. They advance the view that the five-year period
should be counted from the date of discovery of the alleged fraud which, at
the latest, should have been October 15, 1964, the date stated by the Appellate
Court in its resolution of April4, 1978 as the date the fraudulent nature of the
returns was unearthed.
On behalf of the Government, the Solicitor General counters that the
cnme of filing false returns can be considered 'discovered' only after the
manner of commission, and the nature and extent of the fraud have been
definitely ascertained. It was only on October 10, 1967 when the BIR rendered
its final decision holding that there was no ground for the reversal of the
assessment and therefore required the petitioners to pay P1,237,190.55 in
deficiency taxes that the tax infractions were discovered.
Not only that. The Solicitor General stresses that Section 354 speaks
not only of discovery of the fraud but also institution of judicial proceedings.
Note the conjunctive word 'and' between the phrases 'the discovery thereof
and 'the institution of judicial proceedings for its investigation and
proceedings.' In other words in addition to the fact of discovery. there must
be a judicial proceeding for the investigation and punishment of the tax offense
before the five-year limiting period begins to run. It was on September 1, 1969
that the offenses subject of Criminal Cases Nos. 1790 and 1791 were indorsed
to the Fiscal's Office for preliminary investigation. Inasmuch as a preliminary
RESOLUTION
CTA CRIM. CASE NO. 0-947
Page 7 of 8
investig,ation is a proceeding for investigation and punishment of a crime. it
was only on September 1. 1969 that the prescriptive period commenced.
XXX
XXX
XXX
The Court is inclined to adopt the view of the Solicitor General. For
while that particular point might have been raised in the Ching Lak case, the
Court, at that time, did not give a definitive ruling which would have settled
the question once and for all. As Section 354 stands in the statute book (and
to this day it has remained unchanged) it would indeed seem that tax cases.
such as the present ones. are practically imprescriptible for as long as the
period from the discovery and institution of judicial proceedings for its
investig,ation and punishment. up to the flling of the information in court does
not exceed five (5) years.
XXX
XXX
XXX
Unless amended by the legislature, Section 354 stays in the Tax Code
as it was written during the days of the Commonwealth. And as it is, must be
applied regardless of its apparent one-sidedness in favor of the Government.
In criminal cases, statutes of limitations are acts of grace, a surrendering by the
sovereign of its right to prosecute. They receive a strict construction in favor
of the Government and limitations in such cases will not be presumed in the
absence of clear legislation." (Underscoring supplied)
Conversely, based on the holding in Lim, where the period from indorsement to
the Fiscal's Office for the conduct of the preliminary investigation until the.filing of information
in court exceeds jive (5) years, then the government's right to institute the criminal action is
barred f:y prescription.
In this case, reckoned from the July 5, 2012 Joint Complaint-Affidavit of
the revenue officers of the BIR and the July 5, 2012 referral letter signed by
Commissioner of Internal Revenue, I<.i.m S. Jacinto-Henares, which referred the
attached Joint Complaint-Affidavit with its Annexes A to T-104 to the
Department of Justice for preliminary investigation, theJive :Yearprescription ended on
July 5, 2017.
However, the information against the accused was flled in court only on
October 26, 2022.
Rule 9, Section 2 of the Revised Rules of the Court of Tax Appeals,
consistent with Lim, also states that only the filing of the information in court
interrupts the running of the prescriptive period, which began on July 5, 2012:
RESOLUTION
CTA CRIM. CASE NO. 0-947
Page 8 of 8
"RULE 9
PROCEDURE IN CRIMINAL CASES
SECTION 2. Institution of Criminal Actions. - All criminal actions
before the Court in Division in the exercise of its original jurisdiction shall be
instituted by the filing of an information in the name of the People of the
Philippines. In criminal actions involving violations of the National Internal
Revenue Code and other laws enforced by the Bureau of Internal Revenue,
the Commissioner of Internal Revenue must approve their filing. In criminal
actions involving violations of the Tariff and Customs Code and other laws
enforced by the Bureau of Customs, the Commissioner of Customs must
approve their filing. (Rules of Court, Rule 110, sec. 2a; n)
The institution of the criminal action shall interrupt the running of the
period of prescription. (Rules of Court, Rule 110, sec. 1, par. 2a)" (Underscoring
Iupplied)
Clearly, since 2012 more than ten years have elapsed when the information was
filed on October 26, 2022. Evidently, the period exceeded the five-year limit stated
in Section 281 of the 1997 NIRC. Prescription has set in and, therefore, bars the
prosecution from pursuing the criminal case.
WHEREFORE, premises considered, CTA Crim. Case No. 0-947 ftled
against accused, Ziegfried Loo Tian, is hereby DISMISSED on the ground of
prescription.
SO ORDERED.
L.
~ 4<.__
MA. BELEN M. RINGPIS-LIBAN
Associate Justice
Justice
co~~~REs
Associate Justice